Unemployment Rate Rises to 4.5% in April
Apartment rents in the Southland surged to record highs in the first quarter, with the typical two-bedroom unit leasing for nearly $1,400 a month in Los Angeles and Orange counties, according to a study released Friday.
Throughout the five-county region, average rents for all apartments at larger complexes increased by 9% or more from a year ago, as the scarcity of new buildings, rising home prices and sustained job growth pushed up rents at more than double the rate of inflation.
The biggest increase was in Los Angeles County, where renters paid an average of $1,187 during the January-March period. That was a 13% jump from a year earlier and made Los Angeles County the priciest apartment market in the region, according to the quarterly report by RealFacts, a Novato-based research firm. The average rent is derived from surveying apartments of all sizes, from studios to three-bedroom townhomes.
Average rents rose by 10% to $1,175 in Orange County and by about 9% each in the remaining counties, to $1,106 in Ventura, $797 in Riverside and $788 in San Bernardino.
Analysts say landlords have been able to bump up rents as average home prices have climbed sharply. “I think rents will go up for the remainder of the year,” said John Przybyla, regional manager for Marcus & Millichap Inc. in Newport Beach.
Despite the big increase in rents, people are still clamoring to get into many apartments, although affordability is becoming an increasingly constraining factor.
In the first quarter, the apartment vacancy rate in the Southland edged up slightly, to 2.9% in Ventura County, on the low end, and to 3.5% in San Bernardino County, on the high end. The number of empty units in the region remains near record lows.
The RealFacts report indicated that rents were generally climbing sharply higher throughout the state, but there is a slowing in the Bay Area. That’s not the case in the greater Los Angeles area.
“The economy there in Los Angeles is recovering from the bad times and has not taken the hit that the Bay Area has,” said Gerald P. Cox, a RealFacts analyst.
Throughout the Southland, all types of apartments, from studios to townhouses, brought higher rents.
The report found that in Los Angeles County, the biggest gain came in two-bedroom, two-bath apartments--which constitute 40% of the market; these units were going for $167 more a month than a year ago, or a 14% hike. And in Orange County, landlords bumped up the average rent of a three-bedroom, two-bath unit by 17% from a year ago, the report found.
Even so, apartment rents varied widely from city to city.
In Los Angeles County, for example, rents ranged from $486 a month in El Monte to $2,739 in Santa Monica.
RealFacts’ quarterly report covers generally larger apartment complexes, those with more than 70 units in Los Angeles County and more than 58 units in Orange County.
Those apartments tend to have more amenities and, as a result, higher rents than units in smaller buildings.
But analysts say they constitute a big chunk of the market and tend to pull up rents across the board.
